Special Foods as we know them are simply either funded or unfunded products.
There is nothing SPECIAL about these any longer.
This change occurred in August 2016 when Pharmacy contract was changed in relation to the margin.
We had margins of 4% on items with a manufacturer cost of < $150 and 5% on items with a manufacturer cost of >$150. In addition we had SPECIAL FOODS margin of 5%.
The resulting contract changes have seen the SPECIAL FOODS simply become another product within the Pharmaceutical Schedule.
This has seen some dramatic outcomes in profitability in pharmacies that are dispensing reasonable volumes of FOODS that are listed in the Pharmaceutical Schedule as Fully Funded. Unfortunately you cannot purchase at that price due to the fact that wholesalers cannot distribute these in the same manner as traditional funded medicines. They are foods, bulky, costly to handle and freight.
Click here to access the current Foods listing maintained by ProPharma to clearly show pharmacy what is occurring and factually where they are actually doing this business for less than cost.
The list shows all items but the only ones you need to focus on are those listed in the following manner. (Bolded, Italics and Highlighted)
The example shows -$0.06 which is the amount you are short to simply break even on cost, assuming you are purchasing in units of less than an outer. No one should be in business to simply break even.
We do not calculate Outer Pack discount as that is a trading efficiency benefit that you can obtain, but is not always applicable.
Prior to the contract change and the introduction of Permitted Pharmacy Charges, many (if not most) pharmacies throughout the country were adding a small charge to cover the differences.
Under the new contract rules – YOU CANNOT. You put real risk on your retention of a contract.
That does not stop you from talking to your local portfolio manager and having what can only be deemed a commercial discussion.